On behalf of the plaintiffs-appellants, the cause was
submitted on the briefs of Christine K. Nelson of Nelson, Connell
& Kramer, S.C., Brookfield.There was oral argument by Christine K. Nelson.

Respondent

ATTORNEYS:

On behalf of the defendant-respondent, Wisconsin Labor
and Industry Review Commission, the cause was submitted on the brief of Jeffrey
J. Shampo, Madison.There was
oral argument by Jeffrey J. Shampo.

On behalf of the defendant-respondent, TIG Insurance
Company, the cause was submitted on the brief of Michelle L. Danielson
of Halling & Cayo, S.C., Milwaukee.There was oral argument by Roland Cafaro.

On behalf of the defendant-respondent, State of Wisconsin
Work Injury Supplemental Benefit Fund, the cause was submitted on the brief
of James E. Doyle, attorney general, and Stephen M. Sobota,
assistant attorney general.There was
oral argument by Stephen M. Sobota.

On behalf of the defendant-respondent, Thomas McGaw, the
cause was submitted on the brief of Michael H. Gillick of Murphy,
Gillick, Wicht & Prachthauser, Milwaukee.There was oral argument by Michael H. Gillick.

2002 WI App 277

COURT OF APPEALS

DECISION

DATED AND FILED

October 22, 2002

Cornelia G. Clark

Clerk of Court of Appeals

NOTICE

This opinion is subject to
further editing.If published, the
official version will appear in the bound volume of the Official
Reports.

A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals.SeeWis. Stat. § 808.10 and Rule 809.62.

Appeal No.

02-0031

Cir. Ct. No.01
CV 5230

STATE OF WISCONSIN

IN COURT OF
APPEALS

Virginia Surety Co., Inc., and
Stainless

Foundry & Engineering,
Inc.,

Plaintiffs-Appellants,

v.

Wisconsin Labor and Industry
Review Commission,

TIG Insurance Company, State of
Wisconsin Work

Injury Supplemental Benefit
Fund, and Thomas

McGaw,

Defendants-Respondents,

Stainless Foundry &
Engineering, Inc.,

Defendant.

APPEAL
from an order of the circuit court for Milwaukee County:William
j. haese, Judge.Affirmed.

Before Fine, Schudson and Curley, JJ.

¶1FINE, J. Virginia Surety
Company, Inc., and its insured, Stainless Foundry & Engineering, Inc.,
appeal from an order of the trial court affirming a decision by the Labor and
Industry Review Commission that determined that Virginia Surety was the
worker’s compensation carrier liable for occupational disability payments to
Thomas McGaw for the silicosis-based disability he developed during his
employment for Stainless Foundry & Engineering, even though Virginia
Surety’s policy became effective on July 1, 1997, less than two months before
McGaw was forced to stop working because of his disability.The issue presented by this appeal is
whether employer-required medical examinations for an occupation-caused
condition that ultimately results in the employee’s disability set the “date of
disability” as that term is used in the governing statute, Wis. Stat. § 102.01(2)(g)2, when
those examinations cause the employee some “wage loss” but the employee does
not otherwise miss work until the disability ripens into a physical incapacity
to work.As material here,
§ 102.01(2)(g) provides that, under the worker’s compensation law, “‘time
of injury’, ‘occurrence of injury’, or ‘date of injury’ means:. . . 2.In the case of disease, the date of disability.”The Commission held that McGaw’s “date of
disability” was the date when he could no longer work and not when he underwent
employer-required medical examinations.We affirm.

I.

¶2McGaw started to work for Stainless Foundry
& Engineering in 1954, when he was eighteen.With the exception of two years in the armed forces, he worked
continuously for Stainless Foundry until August 25, 1997, which was his last
day of work.During most of that time
he was a grinder and was exposed to sand and dust resulting from grinding
stainless steel castings.This exposure
resulted in his silicosis, which, all parties agree, produced his
work-preventing disability.According
to the Commission’s findings that are not disputed on this appeal, “prior to
his last day of work in August 1997, [McGaw] never missed any time [from work]
because of the symptoms from his condition.”But McGaw was hardly symptom free.Indeed, the record before the Commission reveals that as early as 1983
his x-rays were abnormal.

¶3In October of 1983, McGaw was examined at the
direction of Stainless Foundry & Engineering by Richard G. Harbecke, M.D.,
because, as noted in his medical records, McGaw’s then most recent routine
employer-administered x-ray “was felt to show more abnormalities than in the
past.”The record indicated, however,
that McGaw “has had essentially no symptoms.”Dr. Harbecke concluded that McGaw “has simple early silicosis, and
that there is no more serious process going on.”Dr. Harbecke also noted:“At this point, I think the dust control measures that [McGaw] has
described are adequate, and [I] do not feel he has to be prohibited from
working.”In November of 1983, McGaw
underwent a bronchoscopy as part of Dr. Harbecke’s evaluation “with
transbronchial lung biopsies,” which showed “chronic interstitial pneumonitis
without granulomas or typical changes expected with silicosis although
silicosis could still not be ruled out.”Although at oral argument, Virginia Surety pins the bronchoscopy as
McGaw’s “date of injury” because he had to be in the hospital, McGaw was,
again, reported to be “asymptomatic.”Dr. Harbecke wrote to Stainless Foundry & Engineering in March
of 1984 that McGaw had “early, nondisabling silicosis.”

¶4In 1990, McGaw was re-examined—again at
Stainless Foundry’s direction.In a
letter to McGaw, Dennis Schultz, M.D., reported that there were “old” “abnormal
findings” on McGaw’s x-rays, “which could be explained by past silica exposure.”Dr. Schultz noted that while McGaw’s
breathing test was “mildly abnormal,” which “could also be explained by
silicosis,” Dr. Schultz did “not expect [McGaw to] develop any complaints
in the future.”Among other things,
Dr. Schultz opined that McGaw was “medically qualified to use a respirator
at work,” and Dr. Schultz did not recommend “any restrictions for [his]
usual job, but would recommend that [McGaw] continue to avoid any significant
silica exposures.”

¶5In 1991, McGaw was examined by Marc Rasansky,
M.D., a pulmonary specialist, to whom Stainless Foundry referred him.Dr. Rasansky examined McGaw on December
2, 1991, and reported that McGaw “denie[d] any respiratory symptoms of any
type.”Nevertheless, Dr. Rasansky
opined that McGaw’s “[p]ulmonary function studies reveal mild restriction and
mild obstruction” and that McGaw’s x-ray “is most consistent with complicated
silicosis.”Dr. Rasansky
recommended that Stainless Foundry move McGaw “to an area where he has no dust
exposure whatsoever” because, in Dr. Rasansky’s view, “continued exposure
is dangerous.”A January 1994 x-ray
revealed that McGaw had lungs whose “[a]ppearance is certainly quite compatible
with silicosis.”

¶6McGaw saw Dr. Rasansky again in early
February of 1997.McGaw told him that
he had never smoked and, although “[h]e gives a history of intermittent
shortness of breath, and he states that he becomes tired at work,” McGaw
“denies shortness of breath at work.”Dr. Rasansky reviewed McGaw’s chest x-rays and opined in a March
1997 letter that McGaw’s “entire picture is most consistent with progressive
massive fibrosis, complicated silicosis and secondary underlying pulmonary
hypertension.”Dr. Rasansky was,
however, less than sanguine.He wrote
that McGaw seemed to minimize his ailment and, according to Dr. Rasansky,
McGaw’s “disease is going to be progressive with further development of this
disability.”He further noted:

I feel that [McGaw] grossly underestimates his degree
of disability and symptoms.I consider
him extremely ill but, as you can see from his pulmonary function studies,
these studies do not totally reflect the severe underlying defect.

Since the patient is wearing his respirator and his
area if [sic is?] well ventilated, one cannot adamantly insist that he
discontinue work; however, I would insist that [McGaw] retires at age 62.He will clearly develop increasing and more
progressive symptoms over the next several years.

As we have seen,
Dr. Rasansky’s fears were prescient, and McGaw had to stop working in
August of 1997.

¶7Dr. Rasansky saw McGaw again on June 24,
1997, and his handwritten notes of that examination reveal that he diagnosed
McGaw as having:“Advanced Silicosis,”
“Progressive Massive Fibrosis,” which Dr. Rasansky opined was secondary to
the silicosis, and “Pulmonary hypertension.”Dr. Rasansky wrote:“I feel
he is impaired” secondary to the silicosis and advised that McGaw should “not
work hot humid days.”On July 10, 1997,
Dr. Rasansky wrote a letter that summarized his June 24 findings:

Although Mr. McGaw’s pulmonary function studies are
relatively preserved, I feel that his current dyspnea is totally on the basis
of silicosis.I have asked
Mr. McGaw not to attend work on hot, humid days.Furthermore, if he could be moved to a job outside of the plant
where there is no dust exposure, I feel that his health would improve.

¶8McGaw did not follow Dr. Rasansky’s
advice.He testified at the
administrative hearing that he never missed any work because of his silicosis
symptoms between June 24, 1997, when he saw Dr. Rasansky, and August 25,
1997, when he stopped working and that he “just struggled through” hot, humid
days during that time.

¶9Dr. Rasansky’s findings were echoed in a
September 1999 report by Stuart A. Levy, M.D., submitted by Virginia
Surety.Dr. Levy examined McGaw in
late August of 1999 at Virginia Surety’s request.He concluded:

Mr. McGaw’s employment at Stainless Foundry and
Engineering was a material contributory causative factor in the onset and
progression of silicosis.The work
exposure did not aggravate or accelerate a preexisting condition.The onset of the condition of silicosis was
a direct result of his work place exposure at Stainless Foundry and
Engineering.

Dr. Levy also opined:

To a reasonable degree of medical probability, the
exposure to silica between 1954 and approximately 1986, when measures taken by
Stainless Foundry and Engineering became effective in reducing silica dust
levels below the PEL [permitted exposure level], would have been sufficient to
account for the development of silicosis in Mr. McGaw.The mechanism for the development of
silicosis explains progression of fibrosis even in the absence of further
exposure as a result of either improved environmental measures or even leaving
the work place.

The record does not further
explain what the “permissible exposure limit” was, how it was derived, its
validity, or its application to the issue in this case, other than as support
for Virginia Surety’s contention that McGaw developed disabling silicosis well
before it assumed liability for Stainless Foundry & Engineering’s
compensation claims on July 1, 1997.

¶10The following are not disputed by any of the
parties on this appeal:

•Other than his company-directed medical evaluations,
McGaw never missed work because of a physical incapacity caused by his
silicosis until August 25, 1997; and

•McGaw took either vacation or other
remuneration-based time to undergo the company-directed medical evaluations.

II.

¶11When an appeal is taken from a circuit
court’s review of a decision by the Commission, we review the Commission’s
decision and not that of the circuit court.General Cas. Co. of Wis. v. Labor & Indus. Review Comm’n,
165 Wis. 2d 174, 177 n.2, 477 N.W.2d 322, 323 n.2 (Ct. App.
1991).On such a review, the
Commission’s findings of fact are invulnerable unless they are not “supported
by credible and substantial evidence.”Id.,
165 Wis. 2d at 178, 477 N.W.2d at 324.Although on legal matters the scope of our review is more broad,
we recognize that legal analyses by agencies who have developed expertise in an
area are entitled to deference.Knight v.
Labor & Indus. Review Comm’n, 220 Wis. 2d 137, 147–149,
582 N.W.2d 448, 453 (Ct. App. 1998).

¶12We give “great weight” to the legal
conclusions of the agency “when the following four elements are met:(1) the agency is responsible for
administering the statute, (2) the agency conclusion or interpretation is
long standing, (3) the agency employed its specialized knowledge or
expertise in forming the conclusion or interpretation, and (4) the agency
interpretation provides consistency and uniformity in the application of the
statute.”Id., 220
Wis. 2d at 148, 582 N.W.2d at 453.We give “due weight” when “the agency interpretation is ‘very nearly’
one of first impression.”Ibid.
(quoted source omitted).Finally, we
review de novo the agency’s legal conclusions when they are matters of
first impression.Id.,
220 Wis. 2d at 149, 582 N.W.2d at 453.

¶13As seen below, the Commission’s determination
to disregard company-required medical examinations from the calculus in
deciding on a “date of disability” under Wis.
Stat. § 102.01(2)(g)2 relied on several of its own decisions
interpreting the key court cases.Although these Commission decisions are fairly recent, they reflect an
emerging doctrinal interpretation of the worker’s compensation statute, which
it is charged with administering.Thus,
at least three of the four requirements for giving the Commission’s decision
great-weight deference are present.Moreover, although the Commission has never decided a case presenting
the precise facts raised by this appeal, that is not a prerequisite to giving
the agency great-weight deference.Honthaners
Rests., Inc. v. Labor & Indus. Review Comm’n, 2000 WI App 273,
¶12, 240 Wis. 2d 234, 243, 621 N.W.2d 660, 664.

¶14Giving an agency’s decision great-weight
deference means that we will uphold it if it is reasonable.Id., 2000 WI App 273 at
¶13.As we show below, however, the
Commission’s decision here is more than reasonable; it also passes the
due-deference test, urged upon us as an alternative argument in Virginia
Surety’s reply brief, because “it is reasonable and comports with the purpose
of the statute,” and another interpretation is not “more reasonable.”SeeAmerican Mfrs. Mut. Ins.
Co. v. Hernandez, 2002 WI App 76, ¶17, 252 Wis. 2d 155, 165,
642 N.W.2d 584, 589.

¶15All the parties agree that McGaw is
disabled.Indeed, Stainless Foundry
& Engineering refused to let him work any longer because of his
disability.All parties also agree that
McGaw’s disability stems from his work for Stainless Foundry.His disability, however, did not emerge in
an instant, as industrial accidents generally do.SeeKohler Company v. Department of Indus.,
Labor & Human Relations, 42 Wis. 2d 396, 400, 167 N.W.2d
431, 432 (1969) (“An industrial injury or accident is an event, fixed as to
time and place.”). Rather, it developed
slowly.As Kohler Company
observed:

An occupational disease is a
process, usually extending over a considerable span of time.It has a beginning, relevant on the issue of
causation.It has a progression but this
can vary in individual cases.There can
be a steady deterioration, swift or slow but uninterrupted.There can be improvement and relapse.There can be recovery and
re-occurrence.There can be recovery,
period.On a claim for benefits for
permanent disability, most important is the question, When did the occupational
disease ripen into a disabling affliction?

Ibid.Where disability results from such a
progressive disease, like silicosis, where there is a continuum of impairment
that slowly ripens into a barrier to further work, there is a “conclusive
presumption” that the “date of disability” under the statute is “when the
employee first suffers a wage loss due to” that condition.General Cas. Co., 165
Wis. 2d at 181, 477 N.W.2d at 325.This is because there cannot be a “date of disability” unless there is a
“disability” and evidence of “disability” is the inability to work and
resulting non-compensation.SeeMontello
Granite Co. v. Industrial Comm’n, 227 Wis. 170, 186,
278 N.W. 391, 398 (1938) (“no disability in an occupational-disease case
in the absence of a showing of a wage loss”); North End Foundry
Co. v. Industrial Comm’n, 217 Wis. 363, 369–371, 377,
258 N.W. 439, 441–442, 445 (1935) (workers fired because employer feared
that they would become disabled on the job not entitled to worker’s
compensation when there was no “inability to perform” their work at time of
termination).Of course, the “wage
loss,” need not be actual loss of dollars; loss of remunerative
compensation, whether “sick leave, vacation time, or flexibility of schedule,”
suffices.General Cas. Co.,
165 Wis. 2d at 181–182, 477 N.W.2d at 325–326.

¶16As noted earlier, none of the parties
disputes that McGaw suffered a “wage loss” when he underwent medical
evaluations at Stainless Foundry’s direction.Virginia Surety contends that those visits thus establish the “date of
disability” by virtue of the “conclusive presumption” recognized by General
Cas. Co.The Commission
disagreed:

A conclusive presumption, of course, is an irrebuttable
presumption.However, the commission
declines to read General Casualty to eliminate completely the
need to consider when the occupational disease has ripened into a disabling
condition.Rather, the commission
itself has held that “the date of disability has consistently been interpreted
by courts to be the first wage loss through lost work time attributable to
the effects of occupational disease.” Adams v. Cub Foods,
WC Claim no. 91-074342 (LIRC, March 31, 1993) (italics supplied).

Adams indicates that the wage loss used
to set a date of disability may not just be somehow associated with the
occupational disease in the broadest sense, but must be “attributable to the
effects of” the occupational disease.In other words, Adams suggests the wage loss must be due
to the symptomatic effects of the work injury, not simply the employer’s desire
to monitor a nondisabling condition.One could conclude from Adams that an employer cannot
convert a nondisabling silicosis into a disabling condition with a “date of
disability” simply by requiring a medical examination, an x-ray or other
diagnostic test.Instead, the
occupational disease must have “ripened” into a disabling condition before wage
loss associated with the condition will set a date of disability.

¶17Rothenberger held that “the
simple onset of symptoms which do not cause a worker to seek treatment or lose
work time does not automatically establish a ‘date of disability’ fixing
liability for occupational disease,” because the focus is on “‘when did the
occupational disease ripen into a disabling condition?’”Rothenberger, 1999 WL 55523,
at *2 (quoting Kohler Company, 42 Wis. 2d at 400,
167 N.W.2d at 432).Rothenberger
explained that:“In deciding this
question, the courts look at ‘actual physical incapacity to work’ rather than a
medical or pathological disability which results in no wage loss.”Ibid. (quoted source
omitted).Thus, employer-required
monitoring x-rays and medical evaluations, in the absence of concurrent
incapacity, did not set the “date of disability” even though the employee lost
time from work for those evaluations.Id.,
1999 WL 55523, at *2–3.Kalies
followed Rothenberger and held that time away from work for
medical evaluations did not set the “date of disability” when the time away was
not “due to physical incapacity to perform his work or due to significant
restrictions on his ability to perform his work.”Kalies, 2001 WL 618651, at *3.

¶18We agree that the Commission’s distinction
between non-incapacitating symptoms on the one hand and incapacity to work on
the other is a reasonable interpretation and comports with the intent of the
statute.Indeed, Montello Granite
Co., upon which General Cas. Co. relied, noted that the
supreme court had “consistently held” that under the worker’s compensation act
as it then existed, “‘in cases of occupational disease, in order to entitle an
employee to compensation, he must have sustained such physical incapacity
from disease as renders him incapable of performing his services to the
extent that a wage loss results.’”Montello
Granite Co., 227 Wis. at 187, 278 N.W. at 398 (quoted source
omitted) (emphasis added); General Cas. Co., 165 Wis. 2d at
181, 477 N.W.2d at 325.Montello
Granite Co. recognized the distinction, echoed by the Commission’s
decision here, “between medical or pathological disability which has resulted
in no wage loss and actual disability, i.e., physical incapacity to
work.”Id., 227 Wis. at
188, 278 N.W. at 399.See also Schaefer
& Co. v. Industrial Comm’n, 220 Wis. 289, 297,
265 N.W. 390, 393 (1936) (recognizing need to “distinguish carefully
between medical or pathological disability and actual physical incapacity to
work.”).Here, as the Commission
recognized, McGaw had a ripening affliction that, ultimately, caused his
physical incapacity to work.Until that
time, however, although his disease may have been a “medical or pathological
disability,” it “resulted in no wage loss,” seeMontello Granite
Co., 227 Wis. at 188, 278 N.W. at 399.

¶19The distinction between symptoms that are not
disabling and those that are is a logical application of the worker’s
compensation law.As the Commission
opined in this case, “an employer cannot convert a nondisabling silicosis into
a disabling condition with a ‘date of disability’ simply by requiring a medical
examination, an x-ray or other diagnostic test.”If employers were found to have established a “date of
disability” for a worker when that worker was in their employ by directing the
employee to see a physician, employers might choose not to so monitor their
workers’ health, hoping that the employee would get a job with another employer
who would then be stuck with the “date of disability.”Additionally, an employer might require
examinations with the hope of fixing in time an early “date of
disability” in order to freeze the level of compensation in some
circumstances.See Wis. Stat. § 102.03(4) (“The right
to compensation and the amount of the compensation shall in all cases be
determined in accordance with the provisions of law in effect as of the date of
the injury except as to employees whose rate of compensation is changed as
provided in ss. 102.43 (7) and 102.44 (1) and (5) and employees who are
eligible to receive private rehabilitative counseling and rehabilitative
training under s. 102.61(1m).”); § 102.01(2)(g) (“date of injury” means
“date of disability”); § 102.11 (setting compensation levels by dates of
injury).Neither alternative is
consistent with the purpose of the worker’s compensation law, which is to
compensate employees suffering disabling disease as a result of their
employment, seeKohler Company, 42 Wis. 2d at 408,
167 N.W.2d at 436 (“‘[T]he primary purpose of the law as of all Workmen’s
Compensation Acts, is to compensate in some measure injured workmen for loss
of wage-earning power sustained in the industry.’”) (emphasis in Kohler
Company) (quoted source omitted), and also to protect their health.

¶20Although Virginia Surety assumed Stainless
Foundry & Engineering’s worker’s compensation risk on July 1, 1997, it is
liable for the payments to McGaw because McGaw’s “date of disability” was
August 25, 1997, some two months later.See Travelers Ins. Co. v. Department of Indus., Labor &
Human Relations, 85 Wis. 2d 776, 782, 271 N.W.2d 152, 155
(Ct. App. 1978) (“If a single employer has had successive insurers, liability
is imposed upon the insurer whose policy was in force at the time the
disability occurred.”).While this may
seem unfair, it all evens out:“The
company that had insured the compensation liability at the time disability
occurred is the one that must pay the compensation awarded.This rule will work no injustice to any
individual carrier or employer because the law of averages will equalize
burdens imposed by this act among the employers and the compensation insurers
of this state.”Employers Mut.
Liab. Ins. Co. v. McCormick, 195 Wis. 410, 415–416,
217 N.W. 738, 740 (1928).[1]